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Strategies & Market Trends : A.I.M Users Group Bulletin Board
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To: OldAIMGuy who wrote (13861)12/8/2000 9:45:52 AM
From: labestul  Read Replies (2) of 18928
 
Tom wrote:

Many times we're trying to substitute one stock for another within the same general industry to keep overall portfolio balance. We have to make sure we're making the change for fundamental reasons and not "timing" reasons. If we do it for timing reasons, chances are we'll fail.

These words express what is, in my opinion, the most basic and most important AIM rule that exists!!!

The timing factor in AIM (and it exists and indeed is a critical part) is entirely automatic. It is governed by the buy and sell resistance together with the portfolio control and standards for minimum transaction sizes. In playing with or adjusting AIM parameters one must be sure that one is not unconsciously introducing timing considerations.

It is one thing, for example, to try to use so-called optimum settings for buy and sell resistance (rather than the by the book 10%) on a given security. It is quite another to alter these settings in order to influence the timing. I think that there is a great potential for someone to do the latter even though he believes that he is doing the former.

Doing the former is fine (in theory) but doing the latter (as Tom's statement points out) is at best ill advised and at worst fatal. This is one reason why I still only use AIM "by the book". I only use 10% for both buy and sell resistance. This has worked out for me to date.

I of course have experimented with other buy and sell resistance in simulations. Perhaps someday soon I may start an AIM account with something other than these 10% values. However once such an account is started I will maintain these settings for the life of that account.

Personally I would be afraid to change the settings in an active account because I would not be sure if I were doing it for non-emotional / non-timing reasons or if I were somehow being influenced by my subconscious timing beliefs.

Here is a general question to anyone who changes the buy and / or sell resistance in an active AIM account.

Do you change these settings for timing purposes? If yes, why? If no, what if anything do you do to prevent any subconscious influences?

Barry
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